U.S. petroleum industry wants a carbon tax, your money

The latest report from the U.S.’s National Petroleum Council makes even clearer that contrary to what some optimists might have hoped, the fact we can’t seem to find enough oil anymore won’t be much help fighting human-induced global warming.

The council is made up of executives — dozens and dozens of them — from the oil and natural-gas industries and its financiers, plus a handful of academics, such as chairs of Texas geology departments. Its reports can reasonably be assumed to be the considered wisdom of the industry as a whole, though of course there will be outliers and dissenters.

The body’s latest report is called “Facing the Hard Truths about Energy,” and apparently two of those hard truths are (1) the projections all say that we’ll be screwed for energy by 2030, and (2) … unless maybe we throw a lot more money the industry’s way.

The full PDF of the report is here. It’s 430 pages long, and I won’t pretend to have read anything but the summary and the recommendations, a couple of other bits and pieces, and a couple of news stories about it that possibly quote people who have read it, or have people working for them who do.

(Funny how policy gets made, isn’t it?)

The one bit of good news is that the industry is making a call for sensible — and I’m not being snarky — greenhouse-gas regulation. The petroleum council wants

A U.S. mechanism for setting an effective cost for emitting CO2 that is:
– Economy-wide, market-based, visible, transparent, applicable to all fuels.
– Predictable over the long term for a stable investment climate.

It’s funny to see “visible” and “transparent” next to each other like that, but anyway, the only mechanism I can think of that fits this bill is a carbon tax. I favour a cap-and-trade system for big greenhouse-gas emitters like oil drillers and refiners, which very much does not fit this bill, but the fact they’re advocating a charge for CO2 emissions at all is astounding.

But that, of course, isn’t the only recommendation in the vast report.

The petroleum industry is afraid we’ll run out of energy unless public support somehow convinces it to find and sell more petroleum, a climate of desperate shortage apparently being difficult to run a profitable business in. Among its various recommendations, apparently the U.S. government should:

  • Support regulatory streamlining and research and development programs for marginal wells.
  • Use technology and operational advancements to allow environmentally responsible development of high potential onshore and offshore areas currently restricted by moratoria or access limitations.
  • The Department of Energy should conduct and promote research, development, demonstration, and deployment of industrial energy efficiency technologies and best practices.
  • The research and development tax credit should be permanently extended to spur private research and development investments.
  • Support research into second-generation biofuel crops that have lower input requirements or are suited to more marginal lands.
  • Promote agricultural policies that enhance global production of both food crops and biomass for fuel.
  • Implement the recommendation by the National Commission on Energy Policy to provide $2 billion over ten years from federal energy research, development, demonstration, and deployment budgets for demonstration of
    one to two new advanced nuclear facilities.

Etc. Sigh.

As you’d expect, the petroleum industry is going to fight, wellhead and drillbit, to find new sources of fossil fuels to sell people so they can be burned, even if it takes government subsidies to do it.  This energy-intensive way of life isn’t going to go down easily.

2 responses to “U.S. petroleum industry wants a carbon tax, your money

  1. I don’t think it should be surprising that the oil industry supports a carbon tax. It won’t reduce their profits that much because gasoline demand is very inelastic, and so they will be able to pass most of the costs onto consumers.

  2. Maybe, but these are by and large people who, six months ago, were casting fear, uncertainty and doubt on the very idea that climate change was happening at all. It’s quite a shift.

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